PVinsights: Solar panel makers turn loses due to upstream skyrocketing price

Multi-crystalline module suppliers in dilemma as turning into losses due to irrational price surge in the upstream. As the module prices were fixed in the contracts that were signed earlier, the suppliers had no room to raise their prices along with upstream components and have to suffer from losses at their own costs. Meanwhile, since module manufacturers did not prepare enough stock to meet the shipment deadline by June 30th, they are forced to accept the price hike due to looming shipment deadline. Solar panel prices in China has stabilized in RMB term, but slightly improved in USD term due to appreciation of RMB. However, the situation has became even harsher for module producers while bidding prices kept renewing the lowest record in overseas markets, especially in the emerging countries.

Multi-crystalline module suppliers in dilemma as turning into losses due to irrational price surge in the upstream. As the module prices were fixed in the contracts that were signed earlier, the suppliers had no room to raise their prices along with upstream components and have to suffer from losses at their own costs. Meanwhile, since module manufacturers did not prepare enough stock to meet the shipment deadline by June 30th, they are forced to accept the price hike due to looming shipment deadline. Solar panel prices in China has stabilized in RMB term, but slightly improved in USD term due to appreciation of RMB. However, the situation has became even harsher for module producers while bidding prices kept renewing the lowest record in overseas markets, especially in the emerging countries. In Middle East, recent bids came lower than USD 0.3 per watt. Therefore, with such low-priced solar panel prices, elevated upstream costs are eroding the profitability of solar panel makers while many could barely safeguard their cash costs. Overall, the global prices of multi-crystalline modules stabilized this week as the price improvement in China offset the dips in emerging countries. On the other hand, mono-crystalline modules prices improve slightly in USD term this week due to weaker dollar.


Multi-crystalline wafer prices extend the rally this week with the frenzy of China installation rush before FiT deadline. As the demand in China has improved along with the advent of June 30th, the top tier Chinese multi-crystalline wafer suppliers have seized the timing to increase the prices as to alleviate its liquidity crisis. Following the success of price increase led by the leading Chinese multi-crystalline wafer suppliers, other multi-crystalline wafer suppliers also take the advantage of the strong influence and successfully drive prices up. However, most of the suppliers are still cautious whether the demand strength could sustain through mid-June, as solar suppliers from polysilicon to modules predict a looming China demand cliff after mid- June, implying potential price slash ahead. On the other hand, mono-crystalline wafer prices are unchanged this week in a sign that suppliers remain wary of hiking prices for fear of scaring away cost-sensitive buyers. Regardless of the uptick in multi-crystalline wafer, mono-crystalline wafer suppliers have no intention to raise their prices as to keep stable shipment afterwards. Also, since the prices are still at a relatively elevated level, further price ascension would possibly deter buyer appetite to switch into multi-ones. Hence, mono-crystalline wafer prices remain immobile this week.

Both multi-crystalline and mono-crystalline cell prices continue to rise noticeably over the week due to the speculative price hike led by solar cell makers. Since most solar cell makers are aware that this frenzy in China may soon dissipate with end of June approaching, solar cell makers are aggressively raising prices as to wear the possible market downturn after June 30th. Moreover, due to the uptick in multi-crystalline wafer prices and temporarily restricted supply, solar cell buyers are forced to accept the price hikes since the shipment deadline nears. However, solar cell buyers reiterate that the acceleration of solar cell prices are overdone that they are now turning into losses. The appetites of solar cell buyers for further procurement are also significantly deterred by such rapid pace of price acceleration. Meanwhile, despite the stability of mono-crystalline wafer prices, solar cell makers also increase the prices of mono-crystalline cell along with multi-ones by taking the advantage of the demand rush. Although buyers may be forced to accept due to urgent orders to complete by June 30th, the price rally may soon reverse as the acceptance of buyer wanes and the demand outlook uncertainty mounts.

Polysilicon prices are lifted by surging downstream prices. Chinese polysilicon suppliers are confident in the current solid domestic demand bolstered by installation rush before June 30 as they witnessed mid-stream components continue surging; therefore, polysilicon suppliers also raise the prices and hope the momentum would continue until mid-June. On the other hand, overseas suppliers were more conservative with price modification since their main consumers, mono-crystalline wafer players, holding the prices steady. In general, overall polysilicon prices continue to spike this week amid solid demand in China.

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